The Most Important Story in Online Travel in 2019

Dennis Schaal, Skift

- Dec 30, 2019 1:00 am

Skift Take

Airbnb overtook Expedia in room nights booked in the first quarter of 2019, but questions loom for 2020. Will Airbnb lose its focus as it vows to go public and become a broader online travel agency? Will Expedia, which seems lost in terms of creating a revised strategy, find its way? So many headlines to come.

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Nor was the story about a game-changing acquisition, of which there were few of epic proportions in the last 12 months in online travel.

Instead, the story with the biggest implications in 2019 for online travel was Airbnb exceeding Expedia in booked nights, a milestone that took place without notice, recorded perhaps on some servers or spreadsheets somewhere.

During the first three months of 2019, Airbnb sold 91 million room nights, edging out Expedia’s 80.8 million.

Booking Holdings was still far in the lead during that quarter with 217 million room nights booked. But like a middle distance runner trying to hang on until the finish line, Expedia got fatigued — and Airbnb sprinted ahead. Expedia has had troubles integrating its 2015 acquisition of Vrbo, then known as HomeAway, and in the interim has felt the pain of a troublesome reorganization, a lack of execution, and Google’s ascendance in travel.

In the annals of online travel history, it will go down as a watershed event that Brian Chesky’s Airbnb beat Barry Diller’s Expedia Group in booked room nights in the first quarter of 2019. The Wall Street Journal had buried that particular statistic in a story about Airbnb’s first-quarter results, and Skift put that development into context.

Airbnb’s growth mark should remind everyone that online travel, and the pecking order of its incumbents, is not a static thing. Airbnb could soon be displacing a few erstwhile leaders. The current leadership lineup in descending order by market cap is Booking Holdings, China’s Trip.com Group, Expedia Group, and then TripAdvisor.

If you consider that Google will likely generate about $12 billion in advertising revenue from Booking Holdings, Expedia Group, and Airbnb alone in 2019, before counting everyone else in travel, Google could arguably be considered the leading player.

Airbnb is assuredly on the rise, as our story pointed out. Some of the things that took place in online travel, including Okerstrom’s ouster and a tidal wave of convergence, can be tied in a loose way to the hypercompetitive travel landscape and the growth spurt of short-term rentals that Airbnb symbolizes.

When I asked then-Expedia Group CEO Okerstrom at Skift Global Forum in New York in September about the Airbnb’s accomplishment, he said: “I think it’s a great milestone, but I think it’s a hallmark for how big this space can be in the overall industry.”

Of course, Airbnb’s room night numbers shouldn’t be overplayed because the hotel business at Booking Holdings, Trip.com Group, and Expedia is likely more profitable.

For example, in its annual Security and Exchange Commission filing covering 2018, Booking Holdings stated that its growing alternative accommodations business could negatively affect its profit margins because properties tend to have fewer units than hotels, increased seasonality, and additional costs to offer them online.

Following Airbnb’s first quarter of 2019 room night mark, there has been no reporting of how its bookings have fared for the remainder of the year. If the short-term rental giant indeed goes public in 2020, there will be a lot more visibility into how its booked room nights, and overall business, compares with leading competitors.

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